Consider a $1,000.00 face value bond with a $ 33 annual coupon. Calculate the current yield...

Consider a $1,000.00 face value bond with a $ 33 annual coupon. Calculate the current yield if the bond is purchased for $ 1,080

Suppose a Treasury bill has * purchase price of $ 9,559 a face value of $10,000 210 days to maturity. Calculate the yield to maturity

Expert Solution

Current yield = Annual coupon/Current market price of the bond

Current yield = 33/1080 = 0.03055

Current yield = 3.055%

Yield to maturity = ((Face value-purchase price)/Purchase price)^(365/Number of days)

Yield to maturity = (1+(10000-9559)/10000))^(365/210) -1

Yield to maturity = 7.789%

jeff jeffy answered 2 years ago

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